Address Before a Joint Session of the Iowa State Legislature in Des Moines

Address Before a Joint Session of the Iowa State Legislature in Des Moines

February 9, 1982

Governor Ray, I thank you very much. We've known each other a long time, and I appreciate
more than I can say your warm words of welcome and your warm welcome here this
morning.

It's good to be here with you today, but I must tell you that my real mission in Des Moines is at
WHO radio. [Laughter] You see, some years back, as you may know, I recreated ball games on
the air based on reports that came by telegraph. I would, now that I'm here, like to recreate the
Rose Bowl game, and this time around you know who's going to win.

When I knew the Hawkeyes back in the thirties, they were struggling to get out of one of those
low spots that come every once in a while to a school and a team. Coach Hayden Fry and
quarterback Gordy Bohannon and the rest of that team rode the comeback trail all the way to the
Rose Bowl.

Well, our country today is at a turning point. We've lived too long by the maxims of past decades,
lost in a jungle of government bureaucracy, tangled in its web of programs and regulations. And
almost all of those government initiatives were intended to relieve suffering, enforce justice, or
preserve an environment threatened by pollution. But for each ounce of blessing, a pound of
freedom was quietly stolen.

An all-intrusive Federal Government with Federal Government's big taxing and big spending
doesn't work, never has worked, and never will. Those who cling to the policies of yesterday, who
offer us only retreat, would condemn us and our children to decades more of economic decay --
decades in which our days of greatness would be just a dim memory.

I've come here to talk about moving forward. It'll take spirit, courage, and strength for the long
haul. But we must do it. I'm not here to promise miracles, but I believe we can promise
progress.

So I have come to Des Moines to consult with you, to seek your counsel and your support as,
together, we take the high road to national recovery and renewal. We share the trust of elected
office, you for your State and I for the country and the people who sent me. And I have come to
cement again the bond of partnership too many have forgotten.

Together we must go forward to ensure a decent standard of living for all Americans, but we
must also protect for the next generation this fragile state of freedom so rare in the world and in
the history of man.

I think we've taken the right first steps. We've begun to rebuild America's defenses, which had
been left in dangerous decline. We've made clear our commitment to peace and stability in the
world and our willingness to participate in strategic arms reduction. But we also have made clear
that we will not look the other way as aggressors usurp the rights of independent people or watch
idly while they foment revolutions to impose the rule of tyrants. We will not turn our backs on
those who seek to gain or secure their liberty, and we will not back down from our duty to keep
America strong enough to remain both free and at peace.

At home, we've begun our campaign to return our economy and government to our people.

Our program for economic recovery and our proposal to restore the partnership between State,
local, and Federal government are born from the same philosophy. They spring from an abiding
faith in the American people and in our ability to govern ourselves.

Forty years of uncontrolled government growth and mismanagement, 40 years of removing the
American economy from the hands of the American people, have resulted in the painful recession
that grips us today. In 4 short months, our programs have begun to restore incentive, to cut away
strangling regulations and, for the first time in decades, make significant gains against the budget
monster.

And what do you know? Inflation has dropped to single digits for the first time in 3 years, but it's
not low enough. Interest rates are below their once dizzying heights, and yet they're not low
enough. Our tax and budget cuts were the largest in history, but they only reduced the rate of
increase in taxing and spending. We must hold firm to our tax cuts and reduce the budget even
more. We have much to do before we'll see the light, but I think we're at last and at least
approaching the bend in the tunnel.

Deficits, it is true, still loom large in our forecasts, but they should not overshadow the incentive
and drive that is already building in our people. Our people are beginning to save again. There has
been an increase in the savings rate since the fiscal year began and our programs began in
October. The private savings pool could grow as much as $250 billion by 1984. This will bring
needed growth to our economy and ease the strain on the money supply. In addition, yesterday
we submitted to the Congress a budget schedule that will reduce the Federal deficit every year.
Our deficits will be trending downward.

I'd like to pause here a moment and clear up a couple of things about the budget proposal we sent
to Congress yesterday. So, if the reporters would pick up their pencils and the TV correspondents
would turn on the cameras, I have an announcement.

There will be no general budget cut this year, and there was no budget cut last year. What we did
and what we are doing is reducing the rate of growth in Federal spending. What we're doing is
bringing old-fashioned discipline to the budget. Even before the budget came out, you could hear
the sound of knees jerking all over Washington. [Laughter] The knee-jerk reactions and instant
analyses were as hasty as they were incorrect. Despite all the talk, there is a deafening silence on
alternatives.

From these two pronouncements you wouldn't know that under our proposed spending for the
elderly we'll set a new record of $210 billion -- more than double the amount as recently as 1978.
You wouldn't know, to hear them, that 19 million people will still get food stamps, and over 95
million meals a day -- one out of every seven -- will still be subsidized, that Head Start, the
National Institutes of Health, minority business assistance, aid to traditionally black colleges and
other major programs will not be reduced from our 1982 request.

And suddenly, people who previously believed the deficit was something you tried to increase
were bemoaning the fact that we had one. They didn't tell you that this year's budget marks the
lowest annual budget growth in 14 years. They didn't tell you this deficit is actually smaller in
proportion to gross national product than in the last recession recovery cycle of 1975 - 78, or that
the deficits will decline in future years.

Yes, the deficit is too big, and I'm not about to use a magic pencil and merely create a balanced
budget or a lower deficit on paper as has been done in the past. The budget we've proposed is a
line drawn in the dirt. Those who are serious about reducing the deficit will cross it and work with
us on our proposals or their alternative. Those who are not sincere in their concern about the
deficit will stay on the other side and simply continue their theatrics. The American people are
tired of theatrics; they want action. And let me tell you, they know the difference.

Our first commitment was to secure America's freedom. We are, as I said, rebuilding our
defenses. Our second commitment was to restore America's economy. We have in place the first
installments of a solid program for economic recovery. We turn now to our next commitment:
paring the unmanageable size of the Federal bureaucracy, returning government to the
governed.

Removing the possibility of solving problems where they occur, forcing Americans to accept the
dictates of a swollen bureaucracy in Washington instead of dealing with their neighbors in city hall
or the statehouse, has to be one of the most serious mistakes of this century. The Federal
Government has become involved in such traditionally local concerns as fire protection, police
pensions, welfare, and pothole repair.

In the last 20 years, the volume of grants-in-aid has virtually exploded. For example, in 1960, total
Federal involvement in fire pollution -- or protection, I should say, amounted to a cooperative
agreement between the Forest Service and State agencies. Today every Federal department,
except State and Defense, and at least 11 other agencies have their fingers in the fire-related
activities of State and local governments. And the taxpayer gets burned.

Divisions of responsibility have blurred beyond recognition. The intentions of big government
were good, but the result has been overwhelming inefficiency, waste, and the kind of regulation
that ends all hope of finding local answers to local needs. The willingness of the Federal
Government to inject itself in matters more properly considered by city or county councils, school
boards or State legislatures, has resulted in a confused citizenry unsure of who to turn to,
unaware of who to blame when things go wrong.

We have to face facts. As one mayor recently put it, big government has led to an unstable
economy, low productivity, and high unemployment. The American people want a change.
America needs a change, and we intend to provide it.

We have proposed the broad outlines of a plan to restore the accountability now missing in our
bloated government. We want to consult with you and your colleagues around the country to
develop the details that will make it work.

Our initial program includes the transfer to the States of more than 40 Federal programs in the
areas of education, development, and social services, and we want to send back the tax sources to
pay for them, as well. But the centerpiece of the proposal is the almost dollar-for-dollar swap of
two of the largest areas of welfare. The Federal Government would take over Medicaid in
exchange for State assumption of Aid to Families with Dependent Children and food stamps.

Since Medicaid is growing at a much faster rate than those other programs, the Federal
Government would assume the heavier burden. We also have proposed a transition period of 8
years and establishment of a grassroots trust fund to ease the return of programs and tax bases.
And these are the areas we want to discuss with you.

Certain law enforcement and civil rights programs dealing with the handicapped and minorities
should remain at the Federal level, but we want to reestablish with you a clear and workable
philosophy to divide the functions of government.

Let us not confuse the ideals that launched the last 40 years of centralization with the failed
realities it has produced. Let us recognize the good that has come from our past efforts, but also
understand that we have come into a new day and must change the way we view government and
government's role in our rapidly changing society.

Governor Thomas Kean of New Jersey, in his inaugural address last month said: ``We must turn
to ourselves, to draw upon the diversity of our people and tap the strength inherent in that
diversity. We cannot view this need to change with resignation; rather, it must be viewed as a
challenge to our ingenuity, our dedication, and our imagination.''

Well, here in Iowa you have a strong two-party system. Your Governor, Bob Ray, has provided
strong leadership, and your congressional delegation, led by Senators Roger Jepsen and Chuck
Grassley, serve you and our country well. Innovation and reform have been the hallmarks of this
legislature. Your reapportionment plan has been called a model for the country. You've made
significant advances against waste and fraud and have a tradition of top-quality public
education.

Yet there are pundits in Washington who consider the statehouse to be the backwater of
American politics. They don't trust you to run your own affairs. They don't trust you to show
compassion to your needy nor justice to your disadvantaged.

Just a few weeks ago, someone in a key leadership position in the U.S. House of Representatives,
one of the people who for decades has presided over the dissolution of our national economy and
system of government, said he would be in no hurry to transfer the authority and resources that
belong to you back to your control. He said he knew of a dozen States right now that would shirk
their responsibilities. He didn't happen to name those dozen States. It makes you wonder which
States are not American enough for him. Well, I'm sure the people in the statehouses around this
country would like to know.

First the elitists fought the tax cuts, saying the American people could not be trusted with an
increased share of their own earnings. Now they say the people we elect to State and local office
can't be trusted to run State and local affairs. Well then, who can we trust? A handful of
individuals with a strong case of Potomac fever, the very individuals who got us into this mess to
begin with?

A recent Gallup poll says today Americans by nearly 2 to 1 trust State governments more than the
Federal Government to remain free of corruption and administer programs efficiently.
Washington, D.C., has no corner on compassion or wisdom or morality. If we do nothing else in
this administration, we're going to convince that city that the power, the money, and the
responsibility of this country begin and end with the people and not in some puzzle palace on the
Potomac.

Some would have us believe that today's world is too complex and our needs too large to be
managed by self-rule. But if no one among us is capable of governing himself, then who among us
has the capacity to govern the rest of us?

It's been said that if we lose this way of ours, this thing we call freedom, history will record with
the greatest astonishment that those who had the most to lose did the least to prevent its
happening. That must not be said of us.

I've told you I'm confident our economic recovery program will succeed. That isn't wishful
thinking. Our plan is based on simple logic. We have deficits because government spends more
than it takes in. We've had only one balanced budget in the last 20 years. Today's interest on the
trillion dollar debt is greater than the total budget in Eisenhower's day. So we're reducing the size
and cost of government to bring the annual increase in cost to less than the increase in tax
revenues.

Now, increasing taxes is not an answer. We doubled taxes between 1976 and 1981 and had the
biggest string of deficits in our history. Besides that, taxes reduced our ability as individuals to
save. Today we're the last of the seven top industrial nations in savings and investment. Our
industrial plant and machinery averages 17 years in age. In Japan, the average is just 10 years. So
we're reducing the tax rate.

Government regulations have cost the American economy an estimated $100 billion a year; we're
reducing the number of regulations.

The Federal Government has, at great cost, been attempting to perform tasks that are not its
proper function. So we're restoring the 10th amendment to the Constitution which says the
Federal Government will do only those things called for in the Constitution and all others shall
remain with the States or with the people.

I don't believe that our destiny is to watch this unique experiment in government slip from
disrepair into decay. But if we remember that freedom rests, and always will, on the individual --
on individual integrity, on individual effort, on individual courage, and in an individual faith in
God -- then we will have met the challenge of our generation and brought our great nation safely
through our turning point in history.

I look to you today and in the coming weeks for guidance as we fashion a new framework for
partnership in government. I ask you to join me as we move forward into a new and more
prosperous era for America and for all of our people.

I promise you there will be no winners and no losers among the States. I promise you that it will
be a fair trade and that the Federal Government will continue to maintain its responsibility for
those things that the Constitution has imposed upon it. But we will, in turn, have faith in your
compassion and in your good judgment and in your sense of responsibility to those people that
you represent here in this great State.

Thank you very much. God bless you.

Note: The President spoke at 10:05 a.m. in the House Chamber of the State Capitol, after being
introduced by Governor Robert D. Ray.

Prior to his address, the President attended an Iowa State Republican breakfast at the Des Moines
Marriott Hotel.